If you’re wondering where to start your AI journey, our latest research points to a clear answer: logistics and transportation. This isn’t just an opinion – it’s backed by hard data. Our comprehensive survey with Fulfillment IQ found that 58% of organizations report moderate to high benefits from AI in logistics and transportation, making it the undisputed sweet spot for initial AI investments.
The numbers tell a compelling story. According to McKinsey, companies leveraging AI in logistics are reducing transportation costs by 5-10% while simultaneously improving delivery reliability by up to 20%. These aren’t incremental improvements – they’re game-changing advantages in an environment where shipping costs and customer expectations continue to rise.
Want to capture these logistics benefits for your organization? Click the image below to read our report with Fulfillment IQ:
Logistics and transportation, the AI sweet spot
In our report, logistics and transportation emerged as the highest-impact area for AI implementation for several compelling reasons.
First, it’s a domain rich in data but historically poor in analytics. Most companies have mountains of information about shipments, routes, carriers, and costs – but they’ve lacked the tools to transform this data into actionable insights. AI fills this gap perfectly, uncovering patterns and opportunities that humans simply can’t discern from spreadsheets.
Second, logistics decisions involve complex trade-offs that computers excel at optimizing. Every shipment represents dozens of variables: carrier selection, service level, consolidation opportunities, delivery windows, and cost considerations. Humans can reasonably evaluate a handful of scenarios; AI can analyze millions in seconds.
Third, logistics improvements deliver immediate, measurable ROI that shows up directly on your P&L. When you reduce freight costs by even a few percentage points, that savings drops straight to the bottom line – making it easier to justify further AI investments.
Real-world applications driving results
The most successful companies aren’t just dabbling with fancy algorithms – they’re transforming fundamental operations. Here’s where they’re focusing their efforts:
Intelligent rate shopping and carrier selection
Instead of defaulting to the same carrier or service level for similar shipments, AI-powered rate shopping systems dynamically evaluate all options for each order based on cost, service requirements, and delivery promises.
Rate shopping also can extend to new areas of benefit, examining if using a carrier that is not the lowest cost option moves you to a new tier of volume discounts, defining future savings for that time period. This combination of optimizations typically reduces shipping costs by 2-20%.
AI-driven rate shopping can save millions in the first year while shaving days off your average delivery times
Dynamic routing based on customer demand
Dynamic routing ensures optimal fulfillment, timely deliveries and lower costs, and minimized customer upsets. Unlike traditional static models, AI-driven solutions continuously adjust decision-making based on real-time data, such as multichannel demand, inventory levels and shipping constraints, to ensure orders get routed from the nearest fulfillment centers.
Areas you can enhance with AI include inventory allocation and how routing is impacted by forecasting. Routing can now be integrated with demand forecasting to ensure the right amount of product is available in each location in order for routing to best optimize delivery and lower costs.
In doing so, you can scale your operations efficiently while maintaining the highest service standards.
Get 200% more efficient in order fulfillment.
Smart shipment consolidation
Most companies struggle to identify all consolidated shipping opportunities, especially when orders are processed in different systems or come from different channels. AI excels at spotting these opportunities automatically.
Implementing AI-driven order consolidation can eliminate thousands of shipments annually – saving on every shipment while reducing your carbon footprint. The system considers factors like delivery windows, customer preferences, and product compatibility to maximize consolidation without affecting service.
Thanks to AI, this can now include considering if you have the right packing assortment, picking processes and consolidation windows to optimize your overall costs. AI can generate suggestions to blind spots, like you ship 40% of your shipments in a box that is only 50% full, indicating a savings opportunity. Situations like these drive up costs and slow fulfillment, and are often overlooked because of the depth of analysis required.
Grab a demo of Deposco to learn how you can ship smarter.
The platform advantage in logistics AI
While the use cases above deliver impressive results, the real power comes from implementing them on a unified supply chain platform that connects execution, intelligence, and planning capabilities.
Discover Deposco’s AI-powered platform: a future-ready engine for finely tuned growth. All your vital systems unified into a dynamic data powerhouse that cuts through the noise and helps you adapt at every turn.
Companies taking this integrated approach achieve 2-3 times greater ROI than those implementing point solutions. Why? Because logistics decisions don’t exist in isolation – they affect and are affected by inventory placement, order prioritization, labor planning, and dozens of other factors.
A unified platform creates a virtuous cycle where better execution data generates better AI insights, which improve planning, which enhances execution. This integration enables capabilities that simply aren’t possible with disconnected solutions – like dynamically adjusting inventory placement based on predicted carrier capacity constraints.
As one logistics director told us: “We tried implementing AI with our legacy ERP solution, but the data was too fragmented and outdated. Once we moved to an integrated platform, we could finally see the entire picture – from order creation through delivery confirmation. That visibility unlocked optimization opportunities we didn’t even know existed.”
Starting your logistics AI journey
If you’re ready to capture the logistics AI advantage, our research identifies a clear implementation sequence:
First, ensure you have a solid data foundation
The most successful implementations start by consolidating information from disparate systems and establishing clear data governance. This doesn’t mean you need to boil the ocean – focus on your most critical logistics data first, then expand.
Next, prioritize use cases with proven ROI
Rate shopping, consolidation, and basic routing optimization typically deliver the fastest returns and build momentum for broader AI initiatives.
Finally, choose the right partner. Look for a provider with deep logistics expertise, a track record of successful implementations, and a platform that can grow with your needs. The right partner doesn’t just provide technology – they bring best practices, change management support, and a roadmap for continued innovation.
Moving Beyond Pilot Projects
Many organizations get stuck in perpetual pilot mode with logistics AI, never scaling beyond initial use cases to capture the full potential. The key to avoiding this trap is to start with a platform that can support your entire AI journey, not just the first step.
A flexible, unified platform allows you to begin with high-impact logistics use cases today while building toward more sophisticated capabilities like predictive capacity management, dynamic network optimization, and autonomous planning.
This scalable approach ensures you capture immediate ROI while positioning your organization for continued competitive advantage as AI capabilities evolve.
The window is wide open
Logistics and transportation AI isn’t just about cutting costs – it’s about fundamentally transforming how you serve customers, adapt to market changes, and allocate resources. Companies that get this right aren’t just saving money – they’re gaining the agility to outmaneuver competitors in an increasingly volatile business environment.
The window of opportunity to gain competitive advantage from logistics AI is still wide open. Early adopters are already capturing the low-hanging fruit and building the data foundations and expertise needed for more advanced applications.
The question isn’t whether logistics AI will transform your industry – it’s whether you’ll be driving that transformation or struggling to respond to competitors who got there first.